A new report shows 54 per cent of young people in Victoria experienced homelessness within four years of leaving out-of-home-care and use services more than other young Victorians.

Hospital admissions for care leavers were 2.7 times greater, emergency presentations 4.5 times greater, alcohol and drug treatment 12 times greater and homelessness services 17.5 times greater, data shows.

Lead researcher Associate Professor Robyn Martin from RMIT University said the research found a lack of transitional planning for young people.

"This exacerbates the fact that care leavers have few options, limited material, social and family supports, and few or no safety nets to fall back on should they experience hardship or difficulty," she said.

"The statutory authority who facilitated the removal of the child from their family is legally and morally responsible for their wellbeing and this should extend to transitional arrangements from care."

The Australian Housing and Urban Research Institute report used data from before the Victorian Government changed funding models to support young people to stay in care until age 21, rather than leaving at 18.

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Chief executive Michael Perusco of Berry Street, an out-of-home-care service in Ballarat, said the extension of care placements from the age of 18 to 21 would make a big difference.

"We know that, for many, out-of-home care can be the start of a life of poor health and wellbeing, social and economic isolation, and disconnection from the community," he said.

"Out-of-home care services, like ours, try to prepare young people in our care as best we can for life in 'the real world', but this can be limited.

"Helping young people who have experienced trauma to transition from out-of-home care into independent living takes time."

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Mr Perusco said Berry Street had also called for increased funding for therapeutic care, to ensure young people received the support they needed to help them recover from trauma experienced.

The report, titled Accommodating transition: improving housing outcomes for young people leaving OHC, found 10 per cent of care leavers received a custodial sentence within four years.

Another 21 per cent received a community sentence.

In Victoria, 871 young people left out-of-home care in 2018 and 2019.

Report writers said there was little coordination of leaving care services, with post-care planning rushed and often close to when the young person turned 18.

Researchers propose the introduction of national minimum standards and auditing processes for young people leaving care.

"All jurisdictions have work to do to ensure that care leavers are supported to develop the skills, information and knowledge they identify they need to successfully transition from care," Associate Professor Martin said.

"We also propose a national, minimum leaving care age of 25 years benchmarked by the National Framework for Protecting Australia's Children.

"There should be no exit into homelessness or inappropriate housing. It is essential that care leavers are closely involved in the development and implementation of the plan.

"They are the experts of their lives and know what they need."

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